The document discusses IBM's approach to innovation. It provides definitions of innovation used at IBM, including the intersection of invention and insight that creates value with a holistic view of business models, products/services, and operations. It describes IBM's history of innovation and ongoing transformation, including exiting commoditized businesses and creating a large partner network. It outlines IBM's focus on services, software, integrated solutions, and acquisitions. The document discusses IBM's innovation processes, including internal and external sources of ideas, collaboration tools, and funding programs.

1. © 2015 IBM Corporation
Innovation @ IBM
- Anders Quitzau, innovation Executive
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April 2015

2. © 2015 IBM Corporation
Innovation@IBM
IBM’s definition of innovation
§ Intersection of invention and insight
§ Creates value
§ Holistic view
– Business model
– Products & services
– Operations

3. © 2015 IBM Corporation
Innovation@IBM
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4. © 2015 IBM Corporation
Innovation@IBM
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IBM’s early days....

5. © 2015 IBM Corporation
Innovation@IBM
© 2013 IBM Corporation
§ Exited commoditized businesses:
– PCs and small servers
– Hard disk drives
– Printing Systems
– Network
§ Created a partner world of more than 100K
partners: ISVs, VARs, resellers, developers,
CSIs
§ Platform Strategy
§ Strengthened position in:
– Business Consulting
– Analytics, cloud computing, Social, security
and Mobile
– Open, modular systems
§ Acquired 160+ companies in last 14 years
– to complement and scale our portfolio of
products and offerings
§ Transformation to cloud – changes revenue model
§ Revenue of $99.7B
§ Record net income of $16.4
§ Growth markets accounted for approx. 23 % of IBM’s total
geographic revenue
§ More than 6.800 US-patents
§ 197 BUSD market value
– New EPS record 16.3 $ in 2013
– $10.55B in Free Cash Flow generated in 2013
– Returned $18 B to shareholders
IBM’s Ongoing Transformation Journey
Remixed our portfolio toward services,
software, and integrated solutions…
Key figures
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6. © 2015 IBM Corporation
Innovation@IBM
Recent historical highlights
2002
Sharing & partnering
The “Smarter” phase of our transformation is underway
2010
Making things smarter
§ Instrumented, interconnected,
intelligent
§ Enable growth and productivity
§ Optimize the whole system
§ The Social Business
2006
Globally integrating
§ Right skills, right place, right
cost
§ Rationalize support functions
for greater efficiency
§ Radically simplify processes
§ Consistent set of processes
worldwide
§ Leverage best practices
§ Standardize and reduce waste
§ Governance and performance
discipline
Cognitive Computing
§ NLP, Machine learning
§ Computing on humans’
terms
§ Game changer
2013

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Innovation@IBM
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How do we capture new innovative ideas?
Internal & External Sources for New Idea Generation
Internal Sources
External Sources
Source: The Global CEO Survey 2006

8. © 2015 IBM Corporation
Innovation@IBM
Real-time analytics
Financial governance
Governance, compliance, risk
management
Financial risk management
Data and
document capture
Data warehouse
appliances
Cloud-based analytics
BPM for LOB
Security intelligence
Social enterprise
management
Cloud integration
Business Need Acquisitions since 2010
Capitalize on big data to
know and act
Engage customers, citizens
and employees as
individuals
Speed delivery of new
products and services
Enterprise asset
management
Network automation
Use cloud to drive strategic
change
Protect the brand and future
Engage anyone, anytime,
anywhere
Customer experience
management
Incentive compensation
and sales performance
management
Application development
Information lifecycle
governance
Endpoint management
Data analysis and migration
Cloud-based recruiting and
talent management solutions
Automated business analytics
Information
optimization
Master data
management
Web analytics
Software testing
for complex systems
Mobile management and securityMobile computing platform
Mobile messaging
Cloud computing infrastructure
Advanced threat protection
Document and image
viewing
Procurement and
sourcing
Enterprise marketing managementB2B integration
Threat analytics
High-speed file transfer
Acquisitions increase the value we offer clients and accelerate our moves
into fast-growing markets – since 2000 160+ SW acquisitions + cloud
centres
Legal Information
governance

9. © 2015 IBM Corporation
Innovation@IBM
Innovation is about people – Getting ideas on the table – and
implementing the best

10. © 2015 IBM Corporation
Innovation@IBM
§ Technical
§ Business
We Embrace Collaborative & Open Innovation
Enabling culture
change
§ Established an innovation agenda
that spans multiple dimensions:
– Product
– Services
– Business process
– Business model
– Management and culture
– Policy and society
§ Enabled global collaboration
– Culture of collaboration
– Innovation ecosystem
§ Build Excellence in acquisitions
Why? What we’ve done
§ Become our clients’ “innovation partner”
– Address client priorities
– Build deeper client relationships
§ Respond to changing nature of innovation
§ Organizations need each other to be
successful
– Pace of innovation outstrips an organization’s
ability to “go it alone”
§ Changing workforce dynamics
– Globalization
– “Millennials”
Venture
Capitalists ISVs Business
Partners
Universities
Community
Leaders
Competitors
Employees
Regulatory Bodies
Investors
IT Analysts
Alumni
Standards
Bodies
Policy-
makers
Clients
Innovation Ecosystem
“We opened up our labs, said to the world, ‘Here
are our crown jewels, have at them’. The Jam --
and programs like it – are greatly accelerating
our ability to innovate in meaningful ways for
business and society.” - Sam Palmisano,
IBM CEO

11. © 2015 IBM Corporation
Innovation@IBM
Ideas source:
Internal, partners and customers
Weekstomonths
Breadth
Today – As is
Solutio
n
Solutio
n
Solutio
n
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Fail many, but fail cheap - Our Philosophy of Innovation
Service Service Service
Yesterday – as was
idea
Service
18monthsto2years
Ideas source:
Internal
§ Use of exposed common
capabilities to enable
rapid service assembly
2
§ Larger variety of compelling
offerings to offer customers
3
idea idea
idea
idea
idea idea
idea
idea
ideaidea
idea
idea idea ideaidea
idea
§ Ideation and Product
Inception from the
expanding source for
innovation
§ Use Collaborative tools
to solicit interactive
feedback.
1
§ Limited
community to
foster new
innovation
§ Little user
interaction and
market feedback
§ Service silos
§ Limited reuse
§ “Build it and
they will come”
approach
Solutio
n

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Innovation@IBM
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Idea management models

13. © 2015 IBM Corporation
Innovation@IBM
© 2013 IBM Corporation13
IBM-led
Innovation
External-led
Innovation
Involvement of
External Partners
l IBM Applied Research Projects
l Emerging Business Opportunities
l TAP / BizTech
l Seed-stage Startupsl First Of
A Kind
l IBM Industry
Solutions
l IBM Business
Partner Solutions
l IBM Research Services
l Ideahub
l Product & Service Offerings
l Idealabs, Jams
“Bleeding
Edge”
Generally
Available
l University Programs
l Extreme Blue
l Startups / Entrepreneurs
l VC Backed Firms
(Late Stage)
Maturity of Tech-
nology/Solution
l Academy of Technology
l IBM Institute for Business Value – studies and PoVs
l IBM Basic Research Projects
l IBM / Client Joint Innovation
l Acquisitions
l AlphaWorks
l CIO-fund
IBM’s innovation portfolio reflects the tremendous creativity and
contributions of many organizations – both within and outside IBM

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Innovation@IBM
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8
Innovation Enablers
§ Open & transparent business strategy
§ Permission and alignment
§ Collaboration tools
§ Communities of early adopter
§ Employee awareness & education
§ Agile, speedy funding programs
§ Social networks

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Innovation@IBM

16. © 2015 IBM Corporation
Innovation@IBM
Front end innovation as a dynamic, core discipline at IBM
INSIDEOUTSIDE
Partners
Clients
Internal
Stakeholders
IBV & CAI
studies
Global
Technology
Outlook
FOAK
Mobilize Interest,
Collaborate
Mobilize Interest,
Collaborate
Incubate, Prototype
and Validate
Identity
Challenges/Create
Ideas
Implement, Take
to Market
IBM Lines of
Business
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17. © 2015 IBM Corporation
IBM Research
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18. © 2015 IBM Corporation
Innovation@IBM
IBM’s research and development
IBM is 22. year in a row leading the way in
IT-research by having:
– a yearly R&D-budget of six billion dollars
– over 3.000 researchers, scientists and
engineers
– five Nobel prize winners
– eight research laboratories in six countries
– 24 development laboratories worldwide
IBM has the most IT-patents in the world:
– In 2014 IBM beat its own record with 7.534
patents and can call itself world champion in
”most granted patents.”
– Over 50.000 active patents globally
IBM’s number of non-IT-related patents is
growing:
– Patents regarding organizational-
development, solutions and business
processes
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Innovation@IBM
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IBM Research Labs
IBM Research – “The World is our Lab”
China
WatsonAlmaden
Austin
Tokyo
Zurich
India
Dublin
Australia
Brazil
Africa
§ Next Gen Public Sector
§ Water & transportation
§ Human Capacity Development
§ Natural Resources
§ Disaster management
§ Healthcare/Life Sciences
§ Natural Resources
§ Smarter Devices
§ Human Systems/Events
§ Analytics & Intelligence
§ Systems &Software
§ Industry research
§ Internet of Things
§ Big Data / Analytics
§ Enterprise Cloud Services
§ Energy, Commerce, Traffic
§ Big Data Analytics
§ HW & SW Quality
§ Cloud
§ Mobile
Haifa
§ Smarter Cities
§ Analytics
§ Services
§ Big Data Analytics
§ Front Office Digitization
§ Semiconductors
§ Systems
§ Software
§ Services
§ Analytics
§ Semiconductors
§ Processors
§ Analytics
§ Storage
§ Nanotech
Healthcare
§ Nanotech
§ Security
§ Business
Analytics
§ Systems
Industry Solution Lab

20. IBM Research
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IBM Research: Collaborative Innovation
China
WatsonAlmaden
Austin
Tokyo
Haifa
Zurich
India
IBM Research Lab
Global, Smarter Planet Collaborations
Pangoo

21. © 2015 IBM Corporation
Innovation@IBM
Invention by ‘luck’ still happens

22. © 2015 IBM Corporation
Innovation@IBM
Taking big data
to the extreme

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Innovation@IBM
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We engage in public/private partnerships, like the EDISON and
ECOGRID projects on Bornholm
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§ Total budget: 24 million Euro (EU funding 13 million Euro)
§ IBM: 171 man months, around 2.2M DKK of servers and
other equipments, IBM SWG products (ILOG, WAS, MQ,
DBMS)
§ Demonstration > 50 % of budget (excl. replication/
deployment)
§ A large scale demonstration of a real-time market place for
distributed energy resources
§ A demonstration of a real power system with more than 50
percent renewable energy
§ To implement ICT systems and innovative market solutions
- offering TSOs additional and more efficient balancing
services
§ To enhance small consumer and local producers to
participate in the power market through real-time
operation, energy storage and savings
§ To make a prototype solution for Europe - offering a “fast
track” option towards market-based Smart Grids in Europe

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Innovation@IBM
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Social - in everything - collaborative, transparent
innovation

27. © 2015 IBM Corporation
Innovation@IBM
Social software is today the backbone in IBM’s open innovation endeavors
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Innovation@IBM

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Innovation@IBM
We often run ‘mini-jams’ using IBM Connections idea-widget to
elicit ideas for innovation workshops with customers
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Expanding our Innovation Eco
System - outside the firewall
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IBM Watson: From Grand Challenge through Innovation to
solutions – like a startup

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Innovation@IBM
The Watson
Ecosystem
is a ground breaking
new innovation model
to
scale
transformational
cognitive computing
fast
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32. © 2014 International Business Machines Corporation
The Ecosystem: Delivering the cognitive experience to the
masses
million equity
investments
subject matter experts
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Watson
Developer
Cloud
Watson
Content
Store
Watson
Talent
Hub
+ +
Tools and APIs enabling
ISVs with self-service
training, development, and
testing of their cognitive
application.
Brings together sources of
free and for-fee data, including
general knowledge, industry-
specific content, and subject
matter expertise to help power
Powered by Watson apps.
Helps to bridge ISVs’ resource
gaps by providing a marketplace
for skills like linguistics, natural
language processing, machine
learning, user experience
design, and analytics.
engaged innovators
6000 +

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Innovation@IBM
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Revenue
Growth
GoTo Market activities
Strategic insights
IP Acquisitions
Expanded ecosystems
Credibility &
visibility
Infrastructure
Portfolio
Gaps
addressed
IBM
Start-ups
Expertise
“Gets”“Gives”
IBM work with start-ups in the IBM Global
Entrepreneur Program

34. © 2015 IBM Corporation
Innovation@IBM
§ Promising software programs in
research not yet commercialized.
§ Outside companies and
developers contribute valuable
ideas about bringing them to
market.
§ First-cut versions of research
technology available for free trial
attracting thousands of early
adopters, innovators, and
entrepreneurs to site.
§ 40% of technologies on the site
graduate into IBM products or
industry standards.
AlphaWorks
- Speeding IBM Emerging Technologies to the outside early-adopter
community

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Innovation@IBM
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378,000+ (*including Alumni)
39,000+ users, 500+ IBM groups
(65% outside the US)
80+ accounts using “IBM” in the
name
(25% from outside the US) – over 3,000 IBMers on Twitter
200+ IBM channels
75,000+
100,000 IBMers
collaborating with 200,000
non-IBMers
166 communities, 200+
blogs, 5000+ profiles
Social Media Outside the IBM Firewall examples ( incl Alumni)

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Innovation@IBM
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• IBM Research
• Global Innovation Outlook
• Collaborative Innovation with IBM
• IBM Institute for Business Value
• IBM Smarter Planet
• First-of-a-Kind Projects
• IBM Jams
• Technical Exploration Centers
• IBM Innovation Centers
• IBM Software Labs
• IBM Systems & Technology
• IBM Design Centers
• IBM Benchmark Centers
• IBM Executive Briefing Centers
• IBM Watson Ecosystem
• Innovation Discovery
• IBM Global Entrepreneur
• IBM Voices (social media agregator)
External web pages
Wider IBM Resources

37. IBM Research
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Anders Quitzau
Innovation Executive
andersq@dk.ibm.com
+45 2880 4705
about.me
@Anders_Quitzau
Anders Quitzau
AQuitzau
Aquitzau